Nepal, Feb. 5 -- Banks and financial institutions (BFIs) increased private sector lending by 3.4 percent in the first six months of the current fiscal year (FY), with a growing focus on short-term and relatively safer loans amid rising bad debts.

According to the Nepal Rastra Bank (NRB)'s Current Macroeconomic and Financial Situation of Nepal report, BFIs extended new loans worth Rs 187.66 billion during the review period, taking their total loan portfolio to Rs 5.695 trillion. This was 6.33 percent higher year-on-year compared to the loan volume as of mid-January in FY 2024/25.

NRB data show that loans extended to non-financial institutions accounted for 62.7 percent of total lending, while loans to individuals and households made up 3...